Kreutzer v. Gallagher

• Citation: 282 N.W. 22,229 Wis. 273
• Parties: KREUTZER v. GALLAGHER et al.
• Decision Date: 09 November 1938
• Court: United States State Supreme Court of Wisconsin

229 Wis. 273

282 N.W. 22

KREUTZER

v.GALLAGHER et al.

Supreme Court of Wisconsin.

Nov. 9, 1938.

Appeal from a judgment of the Circuit Court for Outagamie County; Edgar V. Werner, Judge.

Modified and affirmed.

This was an action commenced on June 30, 1937, by Philip Kreutzer, Jr., against Robert E. Gallagher as executor of the estate of Thomas A. Gallagher, deceased, Ruth Van Rooy, Josephine Moyle, and Ted Moyle, defendants, to enforce a liability of defendants as stockholders of the Appleton Press, a Wisconsin corporation, under section 182.23, Stats. Frank J. Huntz, Rena Getschow, Hazel Getschow, and Walter Centner were, upon application, made party defendants to the action, all of them having labor claims similar to that of plaintiff. They duly filed cross complaints for six months wages as employes of the Appleton Press. The action was tried to the court, and findings of fact and conclusions of law duly made and entered. Judgment was ordered and entered on April 8, 1938, in favor of plaintiff Philip Kreutzer, Jr., for $868.46 and costs, and in favor of Frank J. Huntz for $570.89, Walter Centner for $586.27, Hazel Getschow for $174.51, Rena Getschow for $157.06, and Ruth Van Rooy for $329.99. Ruth Van Rooy was both claimant and defendant, being a stockholder of the Appleton Press and also having worked in the plant and acquired a claim for labor against the corporation. Her claim amounted to $529.99, and her stockholder's liability of $200 was ordered offset against this claim, which accounts for the amount of her judgment. Defendant Robert E. Gallagher appeals. The material facts will be stated in the opinion.C. G. Cannon, of Appleton, for appellant.

Catlin & Catlin, of Appleton, for plaintiff respondent.

William J. Geenen, of Appleton, for defendants respondents.

WICKHEM, Justice.

The Appleton Press was a corporation engaged in the printing business in the city of Appleton. Its stockholders were Thomas Gallagher, Ruth Van Rooy, Josephine Moyle, and Ted Moyle. Gallagher held 34 shares of the par value of $3400, and Ruth Van Rooy two shares of the par value of $200. Josephine and Ted Moyle were in default, and the amount of their holding was not established by the evidence or determined by the court. Philip Kreutzer, Jr., was a linotype operator and Ruth Van Rooy, Hazel Getschow, Rena Getschow, Walter Centner and Frank J. Huntz are former employes. On January 17, 1935, Rena Getschow obtained a judgment in the amount of $198.76 against the Appleton Press for wages owing her from such concern. She was not employed by the Appleton Press after the date of the judgment. On February 12, 1935, plaintiff Kreutzer obtained a judgment against the Appleton Press in the sum of $2520 for wages claimed to be due and owing him up to February 5, 1935. Kreutzer continued to work for the Appleton Press at a wage of $40 per week up to the 30th of April, 1935, and received during that period after February 5th the sum of $680. The significance of this payment will be discussed later. Thereafter, on February 1, 1935, a creditors' winding up and receivership action was commenced in circuit court for Outagamie county by defendant Rena Getschow based upon her judgment, and the assets of the Appleton Press passed into the hands of the duly appointed receiver for liquidation on or about April 30, 1935. Plaintiff Kreutzer filed a claim of $2040 in this action. The claim was for sixty-eight weeks, amounting to $2720, with a credit of $680. Each of the other defendant labor claimants and cross complainants filed verified claims for wages due from the Appleton Press. Of these claimants, Kreutzer, Centner, Huntz, and Van Rooy claimed to be preferred labor claimants to the extent of the full wages for the last three months of their employment, and their preferred labor claims were allowed. By the same order the court also allowed the balance of their claims as general unsecured claims, and the claims of Rena Getschow and Hazel Getschow were listed in this class. The receiver had no funds with which to pay these general claims. As a matter of fact, after liquidating the assets and paying expenses of receivership, there remained only $409 for distribution among the preferred labor claimants, and this was distributed to the four preferred claims in proportion to their claims. In return for these payments, the claimants released the receiver from further obligation and liability to each of them. The court ordered, however, that the claims of labor claimants against stockholders of the company for the unpaid portion of their labor claims should not be barred by the receivership proceedings. The receivership was terminated September 25, 1936. On February 18, 1937, Thomas A. Gallagher, who was the principal stockholder of the Appleton Press, died, and on February 23, 1937, Robert E. Gallagher was appointed executor of his last will and testament. By order of the county court the time within which creditors might present and file their claims against the estate was fixed and limited to June 26, 1937. On April 19, 1937, plaintiff Kreutzer filed a claim against the estate of Gallagher in county court for six months wages alleged to be due and owing him from the Appleton Press amounting to $1040. The executor filed written objections to this claim. Plaintiff Kreutzer, pursuant to the county court order, filed a complaint in county court to which the executor demurred, and the claim has never since been disposed of. None of the other wage and labor cross complainants filed any claim against the estate of Thomas Gallagher. On June 30, 1937, plaintiff commenced this action in circuit court against the executor and others who were stockholders of the Appleton Press to recover six months wages under and pursuant to section 182.23, Stats. The remaining cross complainants were thereafter made parties, and the action proceeded to trial. The liability sought to be enforced in this action is thus set out in section 182.23: “The stockholders of every corporation, other than railroad corporations, shall be personally liable to an amount equal to the face or par value stock owned by them respectively *** for all debts which may be due and owing to its clerks, servants and laborers for services performed for such corporation, but not exceeding six months' service in any one case.”

Defendant's first contention is that the circuit court had no jurisdiction of the causes of action against the executor, that the county court was the proper tribunal in which to pursue claims against Gallagher's estate, and that the statute of non-claim has barred all claims there except that of Kreutzer which has never been pursued to a determination. Plaintiff and the cross-complainants rely for their right to commence the action upon section 287.17, Stats., which provides: “No action shall be commenced against an executor or administrator, excepting actions for the recovery of specific property, or actions to establish, enforce or foreclose a lien on property, or to quiet title or remove a cloud on title, to construe wills, enforce the liability of stockholders, to avoid fraudulent conveyances, to pass the title to real property and other actions in which the county court cannot afford a remedy as adequate, complete, prompt or efficient as the circuit court.”

The executor relies upon section 313.08, which provides: “Every claim against a decedent, proper to be filed in probate proceedings in county court, which shall not, after notice given as required by sections 313.03 and 313.04, be filed within the time limited for that purpose, shall forever be barred.”

The executor claims that the matter is settled by In re Estate of Lathers, 215 Wis. 151, 251 N.W. 466, 254 N.W. 550, to the effect that a claim against the estate of decedent, either accrued or contingent, must be filed within the time fixed or limited by the county court or be forever barred under section 313.08. With reference to section 287.17, which provides that no action shall be commenced against an executor excepting, among other things, an action to enforce the liability of stockholders, the executor contends that since the liability under section 182.23 accrued in plaintiff's favor against the decedent in his lifetime, it must be filed as a claim against his estate under the doctrine of Banking Commission v. Muzik, 216 Wis. 596, 257 N.W. 174. That case involved the claim for the superadded liability or a bank stockholder which had accrued during the life of the stockholder, and it was held that this became a claim against his estate to be enforced by filing it as such a claim, and that the claim was subject to the statute of non-claim and barred if not filed, the remedy afforded by the county court being as adequate as that in the circuit court.

We perceive a fatal difficulty in the executor's line of reasoning. While the executor claims that this liability under the statute is a several liability, he concedes that when an action is brought to enforce the statutory liability of stockholders, the creditors and stockholders interested must be joined in one action so that...